Hiding the Cost of Government Leads to Bigger Government | Christopher J. Conover | Cato Institute: Commentary

Hiding the Cost of Government Leads to Bigger Government | Christopher J. Conover | Cato Institute: Commentary: "When the federal government takes an additional dollar from taxpayers, the actual cost to society is generally $1.44. That extra 44 cents represents the deadweight loss of taxation. Every time Congress shifts another dollar from Peter to Paul, it leaves society 44 cents poorer.

The deadweight loss of taxation can be much higher, though. For example, if Congress allows income-tax rates to rise in January, as current law provides, it will cost society $1.50 for every dollar of new tax revenue. Feldstein estimates that each dollar of new income-tax revenue could cost society $2.65!"

"University of Chicago economist Harald Uhlig estimates that federal borrowing carries a much higher deadweight loss, such that every $1 of deficit spending ultimately costs society $4.40."

"The Office of Management and Budget already directs federal agencies to include the deadweight costs of federal taxes when doing cost-benefit analyses of federal spending. Congress should do the same."